Balance Sheet Tracker Update: Liquidity Takeup Continues To Fade

The overall size of the Fed's emergency lending/liquidity facilities continues to fall, with a drop of $17.9B in the week to May 24, and $39.4B over the past month.

• Looking at the composition of that drop, most is attributable to a fall in discount window takeup: at $4.2B now, that's down by $4.8B on the week and has nearly unwound from the $152.9B March banking crisis peak.
• Meanwhile "other credit extensions" have fallen by another $16B to $192.6B (vs a $228.2B peak), reflecting the unwinding of funds provided to the FDIC to successfully resolve the banks that have failed since early March.
• Foreign takeup of Fed liquidity facilities has flatlined near zero since the beginning of April, while 13-3 Pandemic Facilities ($35.7B) continue to wind down at a $0.3B/week average pace.
• The standout line item from last week was the rise in the Bank Term Funding Program (BTFP), up nearly $5B to $91.9B, a new record for the facility which was launched in mid-March. But given that this was offset almost perfectly by a drop in discount window borrowing, it's not concerning from the perspective of banking stress.
• Overall we'd expect to see a continued winddown across these facilities in the weeks ahead, with "other credit extensions" falling further, offsetting a steady rise in takeup of the BTFP (which offers attractive funding terms to financial institutions).
• Our longer-form Fed Balance Sheet Tracker update will be published next Friday June 2.